HOUSTON, Oct. 31, 2012 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) today announced it has reached an agreement in principle to acquire a one-third interest in the Sand Hills and Southern Hills pipelines, both of which currently are under construction by DCP Midstream, LLC (DCP Midstream), a 50/50 joint venture between Spectra Energy and Phillips 66. The transaction is expected to close by the end of November. Upon closing, Spectra Energy, Phillips 66, and DCP Midstream each will own a one-third interest in the two pipelines – and will equally fund the remaining capital expenditures through completion of the pipelines. The aggregate investment by Spectra Energy in the two pipeline projects is expected to be between $700-800 million.
"Sand Hills and Southern Hills are outstanding natural gas liquids (NGL) pipeline projects that are a strategic complement to our existing network of natural gas pipelines across North America. Investing in these NGL pipelines, with our DCP Midstream joint venture partner Phillips 66, allows DCP Midstream to continue advancing its attractive growth plans," said Greg Ebel, president and chief executive officer, Spectra Energy Corp. "As these NGL pipelines begin serving customers later this year and in 2013, they will directly add attractive, stable earnings and cash flow to Spectra Energy's results."
The Sand Hills pipeline is designed to provide NGL transportation from the Permian Basin and Eagle Ford region to the premium NGL markets on the Gulf Coast. Sand Hills, which will have an initial capacity of 200,000 barrels per day and will be expandable to 350,000, is being phased into service with the first phase of the project recently coming online and providing service from the Eagle Ford. Direct connection to Mont Belvieu is expected by year end. The timing of Sand Hills' second phase, which is the Permian portion of the pipeline, has advanced and is now due to be in service in the second quarter of 2013.
Southern Hills will provide 150,000 barrels per day, expandable to 175,000, of NGL transportation from the Mid-Continent to Mont Belvieu, and has a targeted in-service date of mid-2013.
SOURCE Spectra Energy Corp
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